Aquaculturists seek economic traction in Michigan

Russ Allen is as ardent and well-known a proponent of fish and seafood farming, or aquaculture, as you're likely to meet. The pioneering Meridian township shrimp farmer has spent decades building breeding ponds and harvesting shrimp and fish around the world.

Friday is market day at his retail shop in Okemos. With a nearby machine churning out ice to keep product cold, Allen explains the business has a lot of potential to grow in Michigan.

"The first and foremost reason is worldwide fisheries are declining," he explains. "The oceans are overfished, so there is a huge amount of protein that traditionally came out of the ocean that needs to be replaced."

He mentions others. Supplies of fish feed like soybeans are plentiful here. There's a trend toward consuming locally grown food, and imported seafood is one of the biggest trade deficits the U.S. runs. Allen and his fellow members of the fledgling Michigan Aquaculture Association are eager to expand. But, like most small industries, securing capital is a daunting challenge.

"Here in the United States, we don't have any programs that are really development-oriented, to develop new businesses and new technologies, with long-term low interest loans or grant programs--that kind of thing that it takes to get it started," Allen says.

Better Climate in Ohio? Interestingly, the state of Ohio--where aquaculturists have expanded aggressively--may lure him. Officials there like Allen's blueprint for a large-scale shrimp facility and are working with him on it. He may leave the state.

Michigan officials respond that the tiny sector--currently there are only around 100 Michiganders employed in aquaculture--needs to map out a clearer vision of its potential along with more detailed business plans. Until that happens, it should adopt what Secretary of Agriculture Keith Creagh calls a "crawl, walk, run" approach.

"Without having the capacity, without having the capability, without having a guaranteed market, we'd be criticized for making large investment an industry that's in the start up phase," Creagh says.

In Ohio, licensed fish farms have climbed from 35 to 270 in a dozen years. Aquaculture is a $6.5 million a year industry. Dr. Laura Tiu is an official at the Ohio Center for Aquaculture Research. For Michigan, she suggests a longer period of relationship-building.

"Getting the Department of Agriculture on board, working with people in the department of development, USDA rural development. There are so many little agencies and groups that can maybe pick up a small component of the industry development, but they all have to be familiar about aquaculture," Tiu explains.

The Investment Challenge Unfamiliarity is partly why Michigan aquaculturists say conventional financing sources haven't panned out. They say bankers often know nothing about the business. So for now, proponents spread the word about the forces creating industry potential. A new strategic plan from the Michigan Aquaculture Association claims factors like soaring demand amounts to a $100 million opportunity over the next decade. That's estimated growth from 100 current jobs to 1,500. Upper Michigan trout farmer Dan Vogler is the President of the association. He says the sector is caught in a demanding phase common to many small industries--trying to reach economies of scale that justify more investment.

"If you only had five chicken farmers in Michigan, they'd probably have the same issues we have," he says. "But at some point, they overcame those difficulties and moved forward as an industry. You can talk to anybody in business today and they'll tell you about how hard it is to get capital. And so when you have a small industry that's lacking a track record locally you can just take that difficulty and multiply it by ten."

Michigan aquaculturists point to big regional success stories around the country--trout farming in Idaho, catfish down south. With those as examples, along with ongoing pressure to reinvent what's here, they hope financial support is only a matter of awareness and time.